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Punoxysm comments on Open thread, Jan. 26 - Feb. 1, 2015 - Less Wrong Discussion
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Sublinear pricing.
Many products are being sold that have substantial total production costs but very small marginal production costs, e.g. virtually all forms of digital entertainment, software, books (especially digital ones) etc.
Sellers of these products could set the product price such that the price for the (n+1)th instance of the product sold is cheaper than the price for the (n)th instance of the product sold.
They could choose a convergent series such that the total gains converge as the number of products sold grows large (e.g. price for nth item = exp(-n) + marginal costs )
They could choose a divergent series such that the total gains diverge (sublinearly) as the number of products sold grows large (e.g. price for nth item = 1/n + marginal costs )
Certainly, this reduces the total gains, but any seller who does it would outcompete sellers who don't. And yet, it doesn't seem to exist.
True, many sellers do reduce prices after a certain amount of time has passed, and the product is no longer as new or as popular as it once was, but that is a function of time passed, not of items sold.
I don't get what you're getting at.
Pricing is a well-studied area. Price discrimination based on time and exclusivity of 'first editions' and the like is possible, but highly dependent on the market. Why would anyone be able to sell an item with a given pricing scheme like 1/n? If their competitor is undercutting them on the first item, they'll never get a chance to sell the latter ones. And besides there's no reason such a scheme would be profit-maximizing.
On downloaded, digital goods, this would be simple.
Please see the numerical example in this comment